A Strategic Perspective on Automotive Sector in the UK

Running Head: MANAGEMENT 0
A STRATEGIC
PERSPECTIVE ON
AUTOMOTIVE
SECTOR IN THE UK

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Abstract
This report outlines industry environment and internal environment assessment together with
the automotive competitive potential in the UK via some important management framework
and context such as VRIO and Porter Five Forces framework. In case of the automotive
industry, it will help the companies in the industry to identify the attractiveness of the market
as per the above stated competitive forces. With VRIO, Toyota internal and capabilities can
be analysed that is offering its businesses a sustained or temporary competitive advantage or
competitive parity. In order to identify automotive sector attractiveness in the UK, the Porter
five forces model is being used. Later on, CSR responsibilities of Toyota in UK automotive
industry have been assessed and evaluated with other firms and identification of the ways it
influences the organisation act.

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Table of Contents
Introduction................................................................................................................................3
Literature review........................................................................................................................3
VRIO Exploration......................................................................................................................4
Porter Five Forces Analysis.......................................................................................................5
Corporate Social Responsibility.................................................................................................8
Summary..................................................................................................................................10
References................................................................................................................................11

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Introduction
Automotive sector in the UK is an important part of the country economy worth more than
£82 billion turnovers and adding £18.6 billion value to the economy of the UK. The market
size of the industry is very big as over 1.3 million vehicles, 78, 270 commercial vehicles and
more than 2.5 million engines were developed in the UK in 2019 (smmt.co.uk, 2019). In
addition, it also employs nearly 823, 000 people across UK automobiles. In relation with the
nature of the industry, the automobile industry in the UK is in the midst of a period of strong
growth with potential for further expansion. The major players and competitors in the
industry include Honda, Nissan, Toyota and Vauxhall Motors. For this report, Toyota is
chosen as an organisation in the UK automobile sector.
Literature review
Ariyani and Daryanto (2018) stated the significance of VRIO framework with analysing the
internal resources and capabilities of the firm with pointing four key factors lead to firm
resources to become a source of sustained competitive advantage. It presents out business
four main questions as is the resource or capability valuable to consumers, is the resource or
capability in demand and hard to come by, will it be expensive for other firms to replicate the
resources or capability and lastly, does the business have robust structure, system and
processes to take the advantage the resource or capability has. In a simple way, with means,
the resource and capability is setup for constant long-term business success, the great likely
result of the VRIO analysis. The other framework used in the study includes Porter five
forces helps in understanding both the strength of existing competitive position and the
strength of a future prospect where business firm if planning to move forward (Utami and
Lantu, 2014). It relies upon key industry forces influencing the business environment of a
firm such as threat of substitute, risk of new players, and competition among standing firms,
bargaining power of buyers and suppliers.